“We pay off the debt in buying the company with cash from its ongoing operation and by selling off pieces of the business.” – Barbarians at the Gate
Why do windmills love hard rock? They’re huge metal fans.
Two characters were talking to each other in a Hemingway novel (The Sun Also Rises):
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
Irrespective of who has been in the White House, the debt of the United States keeps growing. Gradually. Okay, not gradually. For the most part, the national debt has been doubling every eight years as Presidents keep spending money we don’t have to get re-elected. Wait, why does this keep giving me flashbacks to my first marriage?
To be fair, it’s never fun to be the President who says, “Alright guys, I know the party has been awesome, but it’s time to stop spiking the punch with grain alcohol, I mean, look at Nancy – her liver must be 143 years old now and her husband is hammered. So, let’s go home before we all have hangovers that will last for a decade.”
I found a twenty on the street, so I decided to do what Jesus would do: I turned it into wine.
Debt is funny. A little is hard to notice. When I was first married with The Mrs., we bought a new car. As in, a seriously new car, from a dealership and everything. The monthly payment was okay. So, a few months later, we bought a second one. These weren’t expensive cars, perhaps (total cost) less than 1/3 of what we made in a year. So, not Porsches™ and Lambos©. Think: small Nissan™ truck.
Ouch. We weren’t bankrupt, but we were having to watch all our expenses each month.
When I paid the last payment for the last car? Life was so wonderful. And as debt dropped, we decided to not get into debt anymore (except for houses). It was amazing. That short-term pain and the little hangover that went with a debt moratorium only lasted a little bit. Life was so much better afterward, and all it cost was half a dozen years of discipline. And those were the last “new” cars we ever bought.
Did you hear about the guy in Mexico who drove his Audi® into a lake? Quattro Sinko.
But on a national level, debt has been piling up. It will destroy the country. Some folks (Vox Day, for instance) has long pegged 2032 as the date when it all cracks up. Me? I called 2026 back in 2018. I mean the United States? Everyone could see the U.S.S.R. breaking up, heck, their flag only gave them a one-star rating.
I might be overly pessimistic, since inertia is powerful and the United States has trillions of dollars in inertia. The first of the two factors that led me to that conclusion were the rising medical costs. Eventually, if they keep rising, an aspirin at a hospital will cost $5,382 after insurance.
I wish that were a joke or an exaggeration. The Mrs. went into the hospital earlier this year, and her COVID test was (allowed cost) $1,000. It was negative.
What’s the difference between an art student and a large pizza? The pizza can feed a family.
Yup. Eventually, the costs of medical care – private, Medicare, and Medicaid are going to eat the entire budget. We’ll become like a country that works all day for Band-Aids™ and Neosporin©. Of course, that’s a ridiculous outcome. People will stop going to doctors first. And they are. And our medical system is a mess (from a financial standpoint).
That, as I said, was the first problem.
The second one can’t be escaped – it’s the interest rate trap. The problem is that the United States has been carrying huge chunks of its debt on short-term rates, having to roll it over every few years (on average).
I bought some dirt at high-interest rates. I guess I should have avoided the loam shark.
The United States gets, generally, pretty favorable interest rates – at least when inflation isn’t running at near-record levels. But what happens when, instead of 1% or less, the payments are 4% or more?
Interest on the debt doubles. Take all of the soldiers, stealth fighters, rifles, artillery, missiles, MREs, and aircraft carriers, not to mention all the crayons that the military eats in a year? The interest payments on the debt will be more than that.
As much as I’d love to blame the Leftists, this isn’t a Left-Right thing, mostly. The healthcare crisis was started by Ted Kennedy (can’t turn away people who can’t pay) in the 1980s, but the Right has had plenty of time to fix it. And they’ve only made “compassionate conservatism” while trying to make a “kinder, gentler country” their watchword while expanding medical programs and creating the worst Frankenstein monster yet – a non-private, non-public healthcare system.
Ted was an awful golf player. He couldn’t drive over water.
And the spending? The Right has spent as much (if not more) than the Left. The biggest stop to that in my lifetime was when the Republicans in Congress pushed Clinton into not spending all the cash, and he agreed so he could get re-elected.
In the end, there are more things than just financial that are tearing the country apart, but financial is enough. Angry, hungry people don’t really care who caused the hangover, they just want the pain to go away. Regardless of how it’s done.
That’s how it ends. Gradually, and then suddenly.
But, but Brandon said he cut the deficit in half! What about the debt Mr. imitation president? Debt? What debt?
Let’s print a few trillion in monopoly money. Good things will happen.
Think maybe he meant it would only buy half? If so, he’s an overachiever.
We can sell Sen Fetterman’s neck parasite to China as an aphrodisiac. That should get us through the next quarter.
It’s big enough to have its own gravitational field . . . free energy?
By 2032, the country will be broke.
By 2032, the country will be majority non-American.
That’s why I am an accelerationist. “If it were done when ’tis done, then ’twere well / It were done quickly.”
The country is already broke. Has been for years. If we weren’t the world’s benchmark currency….a status we will lose very soon…the entire system would have already collapsed.
Plenty of “ifs” to go around. If Congress hadn’t accepted and passed the bill on it, we wouldn’t have a central bank. If Jekyll Island hadn’t happened, we wouldn’t have the petrodollar. If the central bank hadn’t (probably) orchestrated it, the Crash of ’29 . . .
What happens when the notes get called, and the central bank decides to foreclose on the US in stead of agreeing to refinance it? You’ll own nothing, and you’ll be happy!
WordPress sucks ! I just tried to post a comment in response to one of your essays. My comments were blacklisted as “UNACCEPTABLE” !
You know WordPress is censoring legitimate comments. Yet you still use their platform for your blog. Why ?
GET RID OF WORDPRESS !
It does. But blogger would eventually ban me.
I don’t think the dollar will last nearly that long . . .
You gotta find a buyer for US Treasury paper if you wanna roll over maturing short-term US debt. That buyer over the past few years (and even moreso in years to come): the Federal Reserve itself, not traditional foreign buyers and not domestic banks and pension plans.
Where does the Fed get the cash to buy US Treasury paper? Money printer go brrrrrr.
https://seekingalpha.com/article/4546772-who-will-buy-our-treasury-debt
It ain’t a bit ‘o difference whether the person sitting in that congressional seat has a D or an R by their name. We. Are. Goin’. Down.
Yup. Get some marshmallows for the fire . . .
The plan seems to be to drive inflation and inflate away the debt but that plan has some historical evidence suggesting it won’t work (see: Moustache Man Bad). Hopefully this fiasco will convince more normiecons that we aren’t voting our way out of this but probably not.
Yup, that works until it doesn’t. Debt made that solution no longer attainable. Weimar, anyone?
“I bought some dirt at high-interest rates. I guess I should have avoided the loam shark.” – Pure. Comedy. Gold.
This is what matters John, not the other things people are getting worked up over. The debt is an inexorable rising tide that not one government official has done a thing to address since…well, since I can remember politics. As you say, both sides are completely culpable. And the the rising interest rates are just going to accelerate everything – Hurray! A whole new level of angsty talking heads!
I would happily take sooner than later – much like getting laid off, the first round gets the best deal.
Prepare now, avoid the rush . . . that’s the way to stay grounded.
Jeez, JW. Kick me gently, why don’tcha. Maybe these things have got to be said, but to wake up to this doom ‘n gloom from the normally sunniest optimist on the ‘net is a tad harsh. Especially the morning after the anticipated Red Wave morphed into a purple trickle.
So it’s disappointment, hyperinflation and mud cookies on the menu, I suppose.
“So it’s disappointment, hyperinflation and mud cookies on the menu, I suppose.”
You wish.
What makes you think those are made of mud?
You see any vacant lots in the concrete jungle?
True Story: I had a kid (20-something, bright, but Kansas-level streetsmart, i.e. nil) working as a production assistant on a TV show stop cold, because we were working on a blustery day near literal Skid Row, and he was about to go grab one of the nearby “dirt clods” to hold down his stack of work papers.
When I explained the same facts of life (no nearby dirt lots, and no restrooms for the homeless in hordes) he got the most disgusted look on his face, and he ran around on tip toes the rest of the day.
Welcome to the Big City.
Likewise, enjoy your “cookies.” 😉
Hey, Monday and Wednesday are fair game. But putting the election in perspective? Probably won’t change a thing, or it will make people give up on leftism…
“Some folks (Vox Day, for instance) has long pegged 2032 as the date when it all cracks up.”
I don’t think we’ll even make it that far.
And Vox is a fag.
Vox’s gorgeous wife and kids might disagree.
Vox is, well, Vox, and he’s on my daily read. Like anyone, he’s fallible, but he certainly (and rightly) called Jordan Peterson out before anyone else did. And he does make the right people mad.
2026 is gonna be rough.
Well, I was figuring that the Demoncraps were planning on throwing the election, Biden resigning so kneepads could “Select Shillery” as Vice President then resign making her “Time has COME” as President of the Titanic.
A mixed election is sand in the wheels of the World Economic Forum’s you’ll own nothing and BE Happy”. Not a lot of sand if the WEF plan is reducing the useless eaters by a small nuclear exchange between Russia and America.
Some facts remain, the ole Mississippi is too low for food transport (SO Beans, Wheat, Corn is sitting on the ground with tarps IN THE RAIN instead of moving to markets), fertilizer plants are shutting down due to price of natural gas, Truckers are nearly broke from high diesel prices, my fuel bill for winter has doubled SO FAR, refuels still ahead if it’s a harsh winter.
OH, and I’m SURE the Democrap SOLUTION to High Food Prices is MOAR EBT Emergency funding. Like Fake Money could create a single loaf of bread to BUY.
If you think things are expensive NOW, save those receipts for fire starters when you get to burn trash barrels for survival.
As my Drill SGT said “Move it or lose it”.
Gradually, then suddenly…
We’re on board the HMS Titanic and can see the iceberg from miles away. Despite screaming at the Captain “Why don’t you change course?”, he stares straight ahead and doesn’t give a rat’s as*, all the time knowing he’s dead meat too.
My guess – huge $$$ devaluation. Silver & gold to the moon and a bankrupt country. Pretty soon. How can a brain dead moron be electecd to the US Senate? We’ll get what we deserve.
It’s weird, inertia can keep a system going for a long, long time.
The System won’t fail due to a lack of interest!
You can take that to the bank!
And, that’s why my husband and I (74 and 72, respectively) are still working. We have Social Security, teachers’ pensions, and investments. All of them vulnerable, should the financial stability of the USA crumble.
They are. And pensions may fail, too. Actual returns are falling below the minimums required to keep the system going.
Excellent piece John. I think we overlook the fact that this is exactly what Clovard Pivens demands to happen. And since we have NO representation, it is exactly what will happen.
It really is planned. Leftists love this.
Whatever your assets, stop quantifying their value in dollars. Start quantifying your holdings in ounces. Over time the purchasing power of dollars (whether stamped on paper or stamped on metal) goes down. The purchasing power of ounces goes up.
https://en.wikipedia.org/wiki/Saddle_Ridge_Hoard
It’s too early for that: metals are still completely manipulated. Better to use gallons of milk, cartons of eggs, or better might be shovels. Soon though, you can get a little closer to reality with metals, if you include the “premium” for taking immediate possession. Most places that comes close to doubling the price.
Ricky-
You piqued my interest on this. From what I fould, silver 1 oz. US Eagles are +/-70% premium, gold & platinum Eagles are 10-15%. Pre-67 silver coins are 50-65%, depending on the seller. Both gold & silver bars have a much lower premium.
I own both American Buffalos and Austrian Philharmonics. I got the Philharmonics because at that time there was a shortage of Buffalos, which had a premium of $10 each or around a half-percent. No big deal, I thought, just get the gold in whatever form before price liftoff. Today the Buffalo premium has increased to $60 each over the Philharmonics, or around three-percent. Naturally today I wish I had Buffalos, but I am still OK with the Philharmonics. Supposedly the rise in premium price is due to the US Mint having production problems and producing 10% fewer coins than last year vs. growing demand.
(Aesthetically, I think the Phils are a much more elegant coin than the Buffs, which to me are just one step above plain ugly. Why we base our national bullion coin on an animal we almost drove to extinction and a naitive population we sent to reservations is beyond me. Personally, I think the imagery on our 24K gold coins should be based on our greatest and unequalled national achievement – Apollo 11. But I digress…)
Rather than price premiums between national bullion coins, I think you are referring to the difference between the spot gold price and the sale price of some particular gold form. Coins have a higher differential because they have more imbedded work per unit weight – but at the same time they have the advantage that they are much harder to counterfit and easier to detect compared to a tungsten-core bar. And coins closer to being of a value supporting personal financial transactions.
Silver differential is much higher than gold right now, as you note, because that reflects the complete disconnect between the fake and totally manipulated spot price and the actual replacement price of a draw from the dwindling amount of material in the COMEX vaults. Read some of Ronan Manley’s articles on silver for details. I personally think the spot price is completely irrelvant and the sooner that scam is busted (hopefully by the new Basel III banking regulations) the better off we will all be. You buy precious metals, you hope it rises enough immediately to cover the bid-ask spread, and then you just go by what the bid resale price is compared to the ask price you originally paid. Like any asset, it’s only really worth what somebody else is willing to pay you for it.
I recommend and have purchased from JD Bullion for orders up to 10 coins, and with Monex for orders in units of ten coins. Both are excellent and I have had excellent service from them in both buying for retirement savings and selling for quarterly living expenses. Even my wife, who initially thought I was nuts taking so much money out of my 401(K) and purchasing precious metals held far away at a IRA repository at Brinks JFK via a self-directed LLC Checkbook IRA, has become quite comfortable with this approach to funding our retirement. Her losing around 30% of her stock-based IRA over the past few years has been very convincing to her.
https://cms.zerohedge.com/s3/files/inline-images/Screen-Shot-2022-09-28-at-6.54.14-AM-1.png?itok=QUiR7pAd
Here’s Monex gold prices, which I check daily.
https://www.monex.com/gold-prices/
At the time I am writing this, the per-ounce gold spot price is $1712, the Buff bid/ask spread is $1807/$1871 and the Phil bid/ask spread is $1749/$1811.
So the premium over spot is 1811/1712 = 3.5% for Phils and 1871/1712 = 9% for Buffs. So the premium for specifically owning US Mint coins is currently double the premium over spot for owning gold coins in general from other national mints. The Phils are perfectly fine for me. The bid/ask spread is (1871-1807)/1871 = 3.5 per cent for Buffs and about the same for Phils. So if you buy gold bullion coins today, the price of gold has got to go up by about $65 per ounce for you to “break even” when you finally sell. Eventually, over the years I hope to be alive during my retirement, gold is gonna go up by a lot more than that.
You don’t wanna fool with silver in a LLC IRA, the storage costs at Brinks for 80X the vault locker space will kill ya. For gold, it’s “only” around 0.1 percent per year – a rounding error compared to the price swings. Still, if the IRS would let me keep it at home (which they don’t), I could put it under my mattress for free…
If you decide you wanna go this route to start holding precious metals in an IRA, I was very satisfied with the significant legal work done by these guys in setting up my IRA LLC:
https://irallc123.com/
I’ve seen a large spread in premiums online as well. Not sure what to make of it. I don’t buy that way, so I don’t know if they’re real. I suspect that they might just “disappear” in shipment the way we hear happening to guns and firearms.
In past, when the paper/physical split was too large, local “coin shops” just had nothing to sell. Now it seems they just raise the premiums. Premiums used to be “interest rate level” numbers, but as you cite they’re now in the 70% range, and I expect they’ll soon be more of a multiplier.
My experience is limited, but when it comes to metals, I don’t believe *any* numbers until the transaction is complete, and you have physical possession.
Fido, Bix Weir says silver’s going to $3,000/oz. Celente’s bullish too.
I’ll settle for $100.
Premiums are a sign that physical is undervalued, and paper is risky. Premiums are lowest on bars.
And, worst case? My kids get some barbaric relics.
Thank You for the link. Never paid attention to much then, Too busy trying to wear-out the Grindstone.
That was NOT an election. It was a SELECTION. Where the PRE-APPROVED candidates were annointed. TINVOWOOT. Want you’re country back. You are NOT going to get it back by voting. To restore America now requires kinetic action, on a massive scale.
Voting seems less useful each election.
Medical costs are rising because government started paying the bills.
(College loan applicants, stop me if you heard this one.)
Look up when Medicare and Medicaid kicked in, and post the price graph overlay on that timeline. Get back to me.
Those of us with private insurance are paying for the cost of old folks who trashed themselves for a lifetime and coasted in Medicare, homeless addict wastrels, illegal Julios, Wangs, and Mustafas, and every deadbeat that skips out on their bill. Our insurance pays for all of them. Suckers.
Quick, name one other sector of the economy where the federal government demands that a business give a product to the customer, regardless of ability to pay, then promises to “help out” the business, buy giving them only 2-3¢ of every dollar of actual cost rung up by all those reliable Democrat voter groups. (I have some idiot on another blog whinging that “Medicare pays the whole bill, because I read it on the internet!” Nope. Not even close. Nice try, fucktard.)
And if your insurance rate skyrocketting costs and co-pays wasn’t bad enough? Quick, tell me: Who pays their taxes to pay for the government’s annual inflating medical promises, even as that very thing destroys health care from within, and the federal budget since ever?
Suckers.
It’s like shooting yourself in the foot, then pointing the gun at your other foot to make sure it was loaded, and pulling the trigger again.
Even Alec Baldwin only cranked off one round.
Limp tall, financial soopergeniuses. You’ve been buying this forever, and now the bill’s actually coming due, and it’s going to blow up the whole economy.
What cannot continue, won’t.
The only open question is when impact occurs.
The results are entirely predictable, just from looking at Weimar, Zimbabwe, and Venezuela.
Brace! Brace! Brace!
Lots of reasons why medical costs have and continue to rise. Gov spending is just one of them. Add in the massive improvement in technology, medicines and surgical techniques that allow us to NOT keep people from dying but merely prolong the process of dying….at very high expense. When I was just starting in healthcare CT and U!trasound were in their infancy, MRI did not exist and we didn’t have half the medications in pharmacies that now exist. Surgical techniques were more primitive and many people didn’t survive to even reach surgery. We have become very adept at POSTPONING the inevitable. At great expense. And in the insanity of EMTALA and you have a perfect storm for insane price increases.
Technology only jacks up the prices for people who use them.
CT machines don’t drive up the price of aspirin.
Taking out an appendix is barely different now than it was 40 or 60 years ago.
But subsidizing care for Gramps, illegal aliens, and shiftless deadbeats is new.
It was also the exact beginning of when medical care prices took off like a moon shot.
And if government pays $40K for an appendectomy, guess how much they’ll all cost, nationwide, by tomorrow?
If health care was responding to market pressure, the prices would be posted online.
You could comparison shop one hospital to the next, like you do with body shop estimates for car repairs.
But they’re not, and you can’t, because insurance companies would find out they’re paying 10x the prices Medicare is paying, and 20x the price uninsured people are paying if they use cash, and you’d scream rape if they paid that, and then turned around and jacked your rates. Exactly like what’s been happening for 50+ years.
This is just another version of “Spot The Sucker” at the poker table.
If you’re the employed, insured patient, or the employer of the insured patient, it’s you.
And it’s simultaneously destroying health care, and forcing everyone into government-run Death Care (“Die already, you old bastards, and stop hogging resources.“), while bankrupting the entire country no matter how much care they cut, and no matter how much euthansia they manage to hand out.
Canadians are starting to figure this out, as their government is practically handing out pillows for younger relatives to use to smother the old folks, because they cost too much to treat and keep alive.
Now that abortion’s gone from the federal problem list, the next battle is going to be to stop the government from sending you to the showers, Auschwitz-style. Mark my words.
Yep, exactly right. Only a government funded (bottomless pockets), mandated, monopoly can raise prices accross the board robbing peter more to rob paul less. And spot on with the “showers” point. Have a plan to defend yourself when they come. Don’t make Solzhenitzn’s mistake, and “burn in the camps”. Find a fire poker or a tyre iron.
^This. See Canada’s euthanasia program.
Dan- Older daughter was born in 1977. C-section, cost $1,500, no insurance. Paid $500 down & $100/mo., no interest.
She had her older son in 2002, also a C-section. Cost $37K. Insurance paid all but $2K or so. Take 1,500 x 5 for inflation, that’s $7.5K. So, 500% increase in cost over 25 years.
Fortunately, for iatrogenic, ethical, credible, and competency reasons, the medical/pharmaceutical industry no longer has any products/services I’m interested in. Don’t get hurt, or they’ll hurt you worse, and if you can’t avoid them, never fall asleep in their care without someone (of substance) on watch.
You are correct, though I think even insurance screwed up the market before Uncle Sugar started owning the market. It is a long way down, and the technical and service side (which are generally excellent) can’t live with the structures related to payment and administration.
“Medical costs are rising because government started paying the bills.
(College loan applicants, stop me if you heard this one.)
Look up when Medicare and Medicaid kicked in, and post the price graph overlay on that timeline. Get back to me.”
🤣 Thank You! Not many people get “The New/Old Math”. SAME as it EVER was. IMHO.
At least until the ‘Indentured Servants’ (VERY popular/prevailing method/Early Immigrants) gained a footing. And limited achievements, “American Dream”.
And THEN?*
https://www.independentsentinel.com/the-truth-behind-give-me-your-tired-your-poor-your-huddled-masses/
Ecclesiastes 1:9
“The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.”
King James Version (KJV)
Denizens at the time? SENDER: “Stop the Illegal Aliens!”. RECEIVER: SAME Deaf Ears.
Imagine being a Disabled Veteran. Begging for $. Recall one SCAM that SEVERAL politicians, or their spouses, or both were involved in. Same one as billy (buffoon) oreilly, and other ‘notables’ ?
( https://www.merriam-webster.com/dictionary/et%20al.) too difficult to spell/look up.
Unsure/Can’t recall/Doesn’t matter. The Song REMAINS the same.
https://www.huffpost.com/entry/charity-fraud-disabled-national-veterans-foundation_n_1499314
but one of MANY…Search Phrase?
https://www.bing.com/search?q=disabled+vet+scam+tied+to+politicians&form=APMCS1&PC=APMC
(disabled vet scam tied to politicians) in plain ‘engrish’, just copy/pasted my search bar.
Stripping them of Their 2nd Amendment Rights was “All the news that’s fit to print” for a minute as well.
IT IS a Wonder?
Matters not. BECAUSE. Eventually the govt. makes it ‘right’. Buried with ‘Military Honors’, some get to hear MORE gunshots.
And Your spouse? If You have one.
Folded american flag as a momento of “Thank You for Your Service”
Made In China. Too.
Occasionally checked out huff-n-Post, Slate, Mother Jones, etc. for fodder elsewhere/laughs.
No Need currently. ‘Laughs’ abound. ANYWHERE ya look.
* May have mentioned, inherently lazy. researched too many things to death. Big Shout-Out to algore for
As a FRESHMAN Senator, Sponsoring/Obtaining massive funding for ARPANET, DARPA, whom/Whateverinventing the Internet.Look For Yourselves. While You STILL can. MUCH has already been ‘Sanitized/Scrubbed’
“… and her husband is hammered.” Well, they do live in San Francisco.
Ha! Still want to know who was the passenger when he wrecked the car. A lot doesn’t add up . . .